Sunday, April 27, 2008

CRM, VoIP, CLEC's -- too many

There was an announcement in TMC's Internet Telephony magazine about Vonage integrating with FreeCRM. Broadsoft already developed hooks into Salesforce. Simple Signal has a hook for ACT! By this point, if you are a VoIP Provider and do not have CRM integration, you are behind the times. (At least that's what the trend in the market will have you believe).

But not every provider chases the same market. Certainly Vonage with their low cost (and unprofitable) service chases everyone. So does Packet8. This reminds me of the early days of DSL. Rhythms, Covad and Northpoint rolled out nationwide, competing not only with each other, but with CLEC's and RBOC's. They didn't win.

VoIP Providers today are in the same boat. They are selling an undistinguishable service nationwide to everyone. Meanwhile, cable companies are winning the consumer battle in VoIP and soon will launch into SMB Voice, which because of bundling, market power, advertising might, and QOS, will likely even de-throne some CLEC's.

CLEC's have had a similar issue. (And if you read my stuff, you know that I b!tch about this often. There isn't much differentiation to what CLEC's offer. What's the difference if you get an Integrated T1 from Nuvox, Paetec, TWTC, or XO? I have no idea either.

Weekly, Paetec looks more and more like XO. What are we today? Wholesale? Retail? Whatever. As if $1B in revenue means success. XO is at a billion. Are they a success? :) Intermedia had $1B in revenue, before their short term debt and minimal margins caught up to them. And having Paetec merge with USLEC, then buy McLeodUSA and Allworx, just to reach a billion... who's dumb idea was that? At the end of the day, it is about the Brand and Profits. Most companies in telecom don't understand or have a Brand. Or think they do, when in fact the marketplace doesn't know what it is. (And a brand is not a logo or a new name. A Brand is how the marketplace perceives of your company. Indifference or Unknown is not a pretty response).

VoIP Providers come in many flavors. And many of them wholesale and retail. Does that model really work? I have not seen it work with Level3 or XO. Starbucks doesn't sell wholesale, do they? How about Wal-Mart? Nope.

I know why VoIP Providers go wholesale: It's very expensive to do retail and there is this hope that if you get more companies selling your product it will grow. That rarely works out. Consumers on DSL don't really need VoIP because the DSl comes with a landline. So get your partners to sell to their Business DSL accounts. Most ISP's have less than 1000 broadband subs. Even at a take rate of 15%, that's 150 VoIP customers. But it rarely works out that way.

Going forward, VoIP Providers will need to start to market to verticals with a specific feature set. This will be a specific marketing strategy per vertical. It makes the messaging easier - and the WOM (word of mouth).

As an aside: CRM isn't used by most companies. Sure, there are many CRM apps available, but who uses them? I work with many small businesses and most do not use CRM. They use Outlook. Where's the TAPI hooks for click-to-call for that? On-screen CallerID? Where's the move to integrate with Apple?

I see more businesses going to a call management system like Google's GrandCentral than looking for VoIP or Unified Messaging. But these are just my thoughts. What are yours?